a. Huawei Corporation is considering the opening of its state-of-the-art research laboratory. The project will involve an investment of $78 000 000 and will produce a positive cash flow of $25 000 000 in the first year. The cash flows will increase by 10.00 per cent each year thereafter for another five years (i.e. the project runs for six years in total). At that stage the project will cease. Huawei expects a rate of return of 17.00 per cent on this project.

i. Calculate the NPV of the project. ii. Should the company proceed with this investment opportunity? Why or why not?